Question

Presented below are a number of balance sheet items for Sandhill, Inc., for the current year, 2017.

Goodwill		$ 128,390		Accumulated Depreciation-Equipment		$ 292,350
Payroll Taxes Payable		180,981		Inventory		243,190
Bonds payable		303,390		Rent payable (short-term)		48,390
Discount on bonds payable		15,350		Income taxes payable		101,752
Cash		363,390		Rent payable (long-term)		483,390
Land		483,390		Common stock, $1 par value		203,390
Notes receivable		449,090		Preferred stock, $10 par value		153,390
Notes payable (to banks)		268,390		Prepaid expenses		91,310
Accounts payable		493,390		Equipment		1,473,390
Retained earnings		?		Debt investments (trading)		124,390
Income taxes receivable		101,020		Accumulated Depreciation-Buildings		270,550
Notes payable (long-term)		1,603,390		Buildings		1,643,390

Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of debt investments (trading) are the same. (List Current Assets in the order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment.)

Answer 1

SANDHILL INC.
BALANCE SHEET FOR THE YEAR 2017
ASSETS	AMOUNT		LIABILITIES & SHAREHOLDER'S EQUITY	AMOUNT	AMOUNT
CURRENT ASSETS:			Current Liabilities
Cash		$       3,63,390	Account Payable		$              4,93,390
Notes Receivable		$       4,49,090	Notes Payable (To Banks)		$              2,68,390
Income Tax Receivable		$       1,01,020	Rent Payable		$                 48,390
Prepaid Expenses		$           91,310	Income tax Payable		$              1,01,752
			Payroll Tax Payable		$              1,80,981
Total of Current Assets (A)		$     10,04,810	Total of Current Tax Liabilities (A)		$           10,92,903
Investments:			Long Term Liabilities
Debt Investment (Trading)		$       1,24,390	Notes Payble (Long Term)		$           16,03,390
			Rent Payable (Long Term)		$              4,83,390
Total of investment (B)		$       1,24,390	Bonds Payable	$        3,03,390
			Less: Discounts on Bonds Payable	$           15,350	$              2,88,040
			Total of Long Term Liabilities		$           23,74,820
FIXED ASSETS:
Goodwill		$       1,28,390	SHAREHOLDER'S EQUITY
Land		$       4,83,390	Common Shareholder's Equity		$              4,70,357
Equipment	$ 14,73,390		Common Stock $ 1 Par Value		$              2,03,390
Less: Accumulated Depreciation	$    2,92,350	$     11,81,040	Preferred Stock, $ 10 Par Value		$              1,53,390
Buildings	$ 16,43,390
Less: Accumulated Depreciation	$    2,70,550	$     13,72,840
Total of Fixed Assets ('C)		$     31,65,660	Total of Stockholder's Equity		$              8,27,137
TOTAL OF ASSETS (A+B+C)		$     42,94,860	TOTAL OF LIABILITES & SAHREHOLDER'S EQUITY (A+B+C)		$           42,94,860
Retained Earning = Total of Assets - Current Liabilities - Long Term Liabilites - Common Stock - Preferred Stock
Retained Earning = $ 4,294,860 - $ 1,092,903 - $ 2,374,820 - $ 203,390 - $ 153,390
Retained Earning = $ 470,357